ANALYSIS: The Toronto-based airline’s new operations in the north suggest it may have larger plans in mind for the region

For Porter Airlines, the relatively short range of the Q400 aircraft has long been a challenge. (Larry MacDougal/CP)

​A Toronto airline’s ceaseless drive to add new destinations could be the best thing to happen for northwestern Ontario travellers in years.

The Porter Airlines destinations list is always changing — new flights and destinations are regularly added and tested. As it owns just 29 planes, Porter has to make tough choices about how to profitably deploy the fleet. When routes underperform, they get dropped. For example, Pittsburgh and North Bay vanished from the route map last September, replaced by Fredericton and Saint John.

One route that has soared from Day One is Porter’s Toronto-to-Thunder Bay service. The airline announced it in March 2009 as a summer-only option. But demand was so high that Toronto-Thunder Bay was made a year-round flight three months later, just as the planes were actually taking off. Last year, the airline announced that Thunder Bay International Airport would be the site of a new crew base employing 40 pilots and air crew. The base’s official opening, on February 1, coincided with the news that Porter will be adding a seventh daily flight from Thunder Bay to Billy Bishop Toronto City Centre Airport.

“For up to 40 good-paying aviation jobs … to land into Thunder Bay is a big deal for a town our size,” says Ed Schmidtke, president and CEO of the Thunder Bay International Airports Authority (airport code: YQT). He also noted that the new Porter hires might help Thunder Bay draw and retain a young workforce — something that’s a challenge for many mid-sized cities. “I was struck at the press conference that Porter held here … that these employees look to me, anyway, to be in their mid- to late-30s.”

Having more aircraft come through YQT will also mean more revenue for the airport (which is already doing well, financially speaking).

And Porter may have bigger ambitions. Many industry observers question whether 40 people are donning the snazzy blue Porter uniform in Thunder Bay just to facilitate one extra daily flight to Toronto and back. Watch for new nodes to branch off from Thunder Bay on the route map before long — perhaps Prairie cities, perhaps U.S. cities, perhaps a mixture of the two.

“Historically, when you move to doing a crew base, there’s an expectation that you’re going to build a bit of a hub around that base,” says Chris Murray, a managing director in equity research at AltaCorp Capital and a veteran analyst of the airline industry. He notes that using a Thunder Bay crew base as a launch point for other locations would be in line with Porter’s established growth strategy. “Keep in mind, they started flying to places in the Maritimes by using Ottawa as a hub.”

Porter’s drive to expand, analysts believe, springs from its need to demonstrate growth in order to eventually undertake an IPO and become a publicly traded company. For years, Porter’s Plan A for expansion involved getting approval for Billy Bishop Airport to extend its runway, which would allow jets to take off safely. Porter could then have purchased jet planes — it had Bombardier’s new CSeries models in mind — and added routes from downtown Toronto to destinations its turboprops can’t reach. President and CEO Robert Deluce offered Las Vegas, Calgary, and Miami as examples. But the federal government had to approve the runway plan first, and when the Trudeau Liberals took power in fall 2015, transportation minister Marc Garneau promptly nixed it.

The Thunder Bay crew base looks like an early move in a yet-to-be unveiled Plan B. In order to demonstrate the expansion that investors want to see, Porter could continue — as it has done since its founding in 2006 — to gradually add routes in an iterative fashion, seeing what works, and what doesn’t.

As Porter remains a privately owned company, it has some ability to keep its secrets until they’re ready to spill. But we do know it’s looking west: when he spoke withNorthern Ontario Business last year, Deluce speculated about moving beyond Porter’s traditional territory along the eastern flank of North America.

Brad Cicero, Porter’s director of communications and public affairs, wrote in an email to TVO: “We have previously indicated a longer-term desire to serve points west of Thunder Bay in North America. The new crew base is meant to provide resources for operating flights within our existing network. We don’t have a timeline for adding other routes, or where they may be operated from.” And for the record, Schmidtke says if Porter is planning new routes out of YQT, the airline hasn’t told the airport yet.

Yet airline industry consultant Robert Kokonis says a crew base in Thunder Bay could help Porter extend its network to points westward. “There’s a lot of folks I bump into in Western Canada that say, ‘I’ve been down to Central Canada on business, and I had a chance to take Porter out of Toronto Billy Bishop. I like the cachet of the brand. I kind of wish they were in Western Canada,’” says Kokonis, president and managing director of AirTrav.

For Porter, the relatively short range of the Q400 aircraft is a challenge: it wasn’t built for the distances involved in direct flights from Toronto (the airline’s central hub) to the cities of Western Canada. Porter test-marketed Toronto-Winnipeg direct flights in 2016. The route was demonstrated to be technically possible for a Q400, but Kokonis says it’s probably too long to be cost-efficient, given all the fuel the small plane would use en route. “In theory, Thunder Bay could help that,” he says. “I could see flights out of Winnipeg through Thunder Bay into Toronto.” (And vice versa, naturally.)

Analysts also mention Saskatoon, Regina, Minneapolis, or Duluth, Minnesota, as potential destinations from Thunder Bay. The holy grail for northwestern Ontario residents, however, would be a flight from YQT to Chicago. You can fly pretty much anywhere in the world from Chicago, and northwestern Ontarians would pay less if they had access to a connection option other than Toronto for flights to Europe, Asia, the Caribbean, and other relatively distant destinations. In other words, a few key air connections could make northwestern Ontario far better connected to the rest of the planet.

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